Centralize Service, Not Business Processes

Transcription

1 Ideas & Insights from Expertus Learning 2.0 Centralize Service, Not Business Processes A Best Practice for Training Outsourcing Where Learning Means Business

2 Our research demonstrates that training outsourcing is indeed a business practice that any savvy manager must consider. Josh Bersin, president and founder, Most organizations that outsource one or more training functions do so to achieve cost savings. According to a 2008 study from Bersin and Associates, the average corporate training department lost 30% of its staff in 2008 and 11% of its budget. According to a 2005 survey, firms that outsource training reduce total per learner costs by 31%. But too often, these savings come at a big price the satisfaction and customized support of business units. And without the backing of these critical stakeholders, any outsourcing initiative is likely to fail. This paper will discuss how to make sure your outsourcing initiative succeeds and even exceeds the expectations of all. The Rush To Centralization One of the key reasons outsourcing is highly cost efficient is because it can help an organization centralize and consolidate key learning functions, such as learning facility administration, class registrations, LMS hosting and integration, and content development and management. Such functions, often called shared services, tend to be used by multiple units throughout the enterprise. In organizations where learning is decentralized that is, when business units autonomously manage learning -- these functions are often duplicated. For instance, different business units might have their own learning administrative staffs, handle their own class registrations, and create their own reports. The positive side of a decentralized approach to training is that business units have total control over employee learning and can tailor all aspects of learning to the specific needs of their employees. The downside of decentralization is that it is rife with inefficiencies. Technology purchases are duplicated. Staffing is often redundant. Integration efforts can be lengthier and more costly because of a lack of standardization. The Challenge Of Centralization When an outsourcing provider initially obtains a company s business, the typical first response is to centralize as many commonly used functions as possible to eliminate duplication of tasks and maximize cost savings. While this does usually result in immediate cost savings, it does not account for the need for different business processes. For instance, the registration process for an intensive, instructor-led sales training course may require the verification of a sales rep s revenue performance and approval by a direct and regional manager. A short virtual presentation delivered by an IT subject matter expert may simply require an applicant to sign up in advance. Both of these processes are valid; using the same registration process for both learning events would likely result in a less-than-ideal solution for all. LMS reporting is another common area in which business units differ in terms of needs. No onesize-fits-all report will adequately meet the requirements of all business units. A customer service manager wants a report that ties assessment scores to customer calls handled in the last 30 days. HR may need simpler reports that 2

3 CONSIDER THIS The typical corporation allocates from 1 to 3% of its overall operating budget to learning. Meanwhile, on average, labor costs absorb a whopping 70% of that same budget. document registration and attendance for compliance reporting. A business-savvy outsourcer understands that preserving valid business processes and providing direct support for business units is fundamental to customer satisfaction at all levels. While efficiencies can be gained through centralization of core services, the delivery of such services will likely require customization. So how do you know when an outsourcer takes this approach? How can you guarantee the business units you serve will continue to have control over their employees learning? And can this approach still deliver the cost efficiencies of typical outsourcing? The Formula For Centralization Success We view this combination of centralization and customization to the approach used for automobile manufacturing. All manufacturers design and produce core components used for multiple car designs. For instance, the chassis used for a Subaru Legacy is the same as that used for a Subaru Outback. However, the body styles, engine sizes, tires, and interior features of the two cars are different tailored to two different target audiences and price points. Certainly, costs count. Outsourcing can bring efficiencies in many areas that businesses just can t match. For instance, those companies outsourcing training administration have a reduction of 30 to 40% in administrative staff (per 1,000 learners). Nevertheless, focusing solely on cost reductions can be extremely short-sighted. Consider this: The typical corporation allocates from 1 to 3% of its overall operating budget to learning. Meanwhile, on average, labor costs absorb a whopping 70% of that same budget. By identifying where training can impact overall workforce performance and have direct correlation to business results, even fractional improvements can generate tremendous financial reward. Through a thorough understanding of business unit requirements and an objective analysis of business processes, Expertus is a good example of a company that helps its customers identify areas of greatest business impact and establish how these rank in terms of priority. Consultants assigned to each business unit ensure each manager is made to feel like a major stakeholder and has the opportunity for direct input. Expertus also welcomes continual input and feedback from business managers. We have quarterly review meetings with business unit managers to go over learner data collected and to discuss all aspects of current and planned programs. Besides helping us continually improve service, these meetings also increase each manager s level of involvement and ownership in learning. At the same time, Expertus develops a detailed, proprietary data on every facet of learning from the rollout of new technology to the creation and generation of reports to the management of course catalogs to identify where services can be shared and where they must be adapted to meet unique needs. This knowledge gives us the ability to develop highly specific service agreements and 3

4 accurately forecast costs. A strong heritage in learning-related technology and associated programming gives Expertus an advantage when learning initiatives involve new technologies, migrations and integrations, or more effective use of existing products. By having a multi-prong focus the centralization of core services, direct support of business units, and the effective application of technology Expertus outsourcing can yield cost savings, increased competitive advantage, and higher levels of satisfaction throughout the enterprise. Here s one example of results that can be achieved through outsourcing. By relying on Expertus for managing training across multiple business units and multiple geographies, a global corporation reduced administrative staffing by 95% while upping satisfaction across the enterprise. Dedicated resources ensure the training needs of the sales organization have equal focus as the needs of the production division. Expertus customer retention rates exceed 90% because we don t force process change on business units solely for the ideal of centralization. Considerations For Choosing An Outsourcing Provider To ensure you find an outsourcing provider who can deliver the full value of outsourcing, following are some considerations to apply to an evaluation: 1. Look for a provider who offers a full spectrum of services business process consulting, technology-related services, administration, and content development and management. Even if your immediate objectives fall into a specific service category, it is to your advantage to have an outsourcing partner who can provide all services, just in case your needs change. 2. Drill down into an outsourcer s technology experience. As technology becomes more and more intertwined with learning, it s important to have a partner who understands all related technologies and who can address issues quickly and cost efficiently. 3. Ask for references, including those from business managers. Look for organizations with multiple business units or diverse training audiences (such as large customer training programs) to discuss how a partner has served them. 4. Ask for task analysis. Find out how the outsourcer determines the time and staff resources required for a variety of highly specific tasks. 5. Discuss a particularly difficult process with outsourcing candidates and obtain suggestions from each about how they would handle it. Smartsourcing: What To Do Next If this paper has you thinking about just how efficient your current training operations may or may not be, contact Expertus and in ten minutes we ll step you through a complimentary Training Efficiency Assessment of your training operations. Comparing your operating practices with data 4

5 from over 100 other large organizations, the assessment will give you a scorecard and supporting insight about areas of your operations that are both outperforming and underperforming in our industry benchmarks. To schedule a training efficiency assessment or to learn more about Expertus services, contact us: info@expertus.com Phone: About Expertus Expertus is the leading global provider of services that optimize the business impact of learning. For more than a decade, the firm s 500+ learning management professionals have defined and implemented plans, processes and technologies that transform training organizations creating measurable value for the world s most successful corporations. Clients include ADP, Cisco, ConocoPhillips, EMC, NetApp and Schlumberger. Every day at these and other companies, more than a million employees, customers and business partners are educated as a result of Expertus innovative business strategies, outsourcing services and technology-rich solutions. Based in Silicon Valley, Expertus serves its clients from offices in the US, UK and India. For more information, visit or call tollfree About The Author MOHANA RADHAKRISHNAN Vice President of Client Services Mohana Radhakrishnan is vice president of client services of Expertus Inc., a learning consulting organization who has helped major companies such as Cisco, ADP, EMC, and Hyperion achieve efficiencies in corporate learning. For the last 10 years, Mohana has been designing and delivering robust learning applications and learning processes. She can be reached via at Corporate Headquarters Expertus Inc 2091 Landings Drive Mountain View, CA Telephone: Toll Free: Fax: info@expertus.com Sales sales@expertus.com Public Relations press@expertus.com Product Support support@expertus.com All products and services referenced herein are either trademarks or registered trademarks of their respective companies.